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Recently, the town of Spencer reached a settlement with Berlin-based Massachusetts Broken Stone (MBS) Company regarding a town-wide road improvement project dating back to FY20.
The town paid $1.5 million for the approximately $1.6 million pavement reclamation, leveling and resurfacing work, retaining $81,216.
In 2021, the town notified MBS that it believed the company defaulted on its obligations. MBS disagreed. As a result, MBS and Spencer filed civil claims against each other in Worcester Superior Court.
In the settlement agreement, MBS agreed to pay $156,659, the claimed value of the surface coat of Kittredge Road. The company also agreed to pay $6,844 for resurfacing of Northwest Road at Brooks Pond Road and $6,986, the estimated value to repair certain areas of the project site.
Other terms included paying 50% of retainage or $40,608 and showing a credit to town for the remaining 50% of retainage.
At a June Finance Committee meeting, Town Administrator Jeff Bridges said one phase of the paving project was paid for with proceeds on a $1.9 million bond issue.
“There was a dispute about the quality of improvements,” Bridges explained, leading to the litigation that was ongoing for four years.
In return for the approximately $170,000 the town was paid, Spencer agreed to lift a notice of default on the contractor.
Bridges noted five years ago, a letter was sent informing MBS of that notice, which he described as a “stab in the heart,” for Massachusetts contractors because it prohibits them from bidding on certain types of projects.
With that notice and both sides deemed not responsible or to blame, the issue was brought to a close.
Bridges spoke about the financial implications of the court case and town counsel services.
FinCom agreed to a reserve fund transfer of $10,200 to the counsel account, for trial expenses and also legal issues related to the assumption of Spencer Rescue Squad assets and the 31 Mechanic Street demolition.
The committee also approved transfers totaling $95,000 from seven other accounts to go towards town counsel (legal expenses). The exact amount needed won’t be known until the town receives a June bill in July, Bridges said. Now that the case is settled—all of the money transferred most likely will not have to be used.
He said preparations for the trial in May cost $50,000 for things like documents, opening statement binders, graphics for presentations and witnesses. One expert witness alone cost $50,000.
The town administrator said the funds for the first three years of the case came from town counsel accounts.
Other sources included $100,000 from federal ARPA funds that were put aside for the case and spent. Late last year, another $130,000 of free cash was appropriated and put aside, with approximately half of that spent on the May bills, Bridges added.
He called the matter, “very unfortunate,” and noted the problems with the road improvements were never addressed. It means the 20-year design life of Kittredge Road may be shortened by about three years and other areas at intersections have some raveling and are “rough like sandpaper.”
FinCom member Taylor Wentworth thanked Bridges for the time he had to spend working on the matter. She acknowledged the town’s disappointment about not completely getting the project it wanted.
Bridges said neither his time or that of Paul Boria and Bill Cundiff (former Utilities and Facilities superintendents) were taken into account.
He also said when all the numbers are known, he would provide the total cost of the case.
